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JPMorgan Chase to invest in Detroit revival: $100M over 5 years

Photo by John Teklinski
View of the Detroit skyline from the Northwest; part of Crain's Summer in the City photo contest.

JPMorgan Chase & Co. made official Wednesday at a luncheon at The GardenTheatre in Midtown what has been dominating the news for more than a day: The nation’s largest bank will be making its largest commitment ever to a city, investing $100 million over the next five years to help revive bankrupt Detroit.

Jamie Dimon, the Chase chairman and CEO, made the announcement before a crowd of business and civic leaders.

William Jones, the CEO of Focus: Hope, introduced Dimon with a joke that drew loud applause about another once-bankrupt entity.

“I feel like I’m representing the nonprofit community here today, the people on the ground who work so hard to make things happen,” said Jones. “I know people are saying, what do I know about nonprofits? I’ve only been at Focus: Hope for five years. May I remind you I was at Chrysler for 27 years?”

After the laughter, Jones continued. “Through its commitment today, Chase has demonstrated, again, that it is a true friend and ally … Thousands of lives will be improved by this.”

“It’s a pleasure to be here,” said Dimon. “Let me make it clear: We are a for-profit institution making an investment in Detroit. I talk all the time to naysayers who say ‘America’s best days are behind us.’ The best time to be born in America is today.”

Dimon praised Dan Gilbert for his help over the seven months of planning that went into the program, which will provide funds for community development, blight removal, job training, small-business support and the M-1 rail program.

“The most critical thing is you have a governor and a mayor coming together to fix the problem. There’s no more finger pointing,” said Dimon.

He also thanked business and civic leaders who had been meeting with Chase officials about how to structure the program.

“You are a shining example to America of how problems can be fixed,” he said.

Chase’s program follows a commitment of $15 million in loans to Detroit small businesses announced by Goldman Sachs Group Inc. in November.

Chase will provide $20 million to each of two nonprofits that invest in local development projects, Detroit-based Invest Detroit, which is affiliated with Business Leaders for Michigan, and Arlington, Va.-based Capital Impact Partners.

Each nonprofit will also get $5 million to beef up staffing and training.

Chase will also spend $25 million on blight-removal projects in the city, including $5 million for the Detroit Land Bank Authority, which is assembling abandoned houses to sell to those willing to bring them up to code, and $5 million to provide rehabilitation loans for those purchasing city houses at auction.

Chase will spend $12.5 million on workforce training programs for city residents, with the remaining $12.5 million to be spent on a variety of projects, including the M-1 rail project and helping such organizations as TechTown and Bizdom help entrepreneurs start companies.

“This is truly something special. Detroit is coming back and has been coming back,” said Gov. Rick Snyder, who talked about 10,000 new jobs and $6 billion of investment that have come into the city in recent years, as well as the 98 percent occupancy rate in Midtown and downtown.

“I never knew working with bankers could be so much fun,” said Detroit Mayor Mike Duggan. “They didn’t come in and say, `We’re from Wall Street, we know how to get things done.’ We did this together … The announcement made today is transformational.”

Duggan also thanked Gilbert and told the crowd about a dinner he, Gilbert, Chase officials and others had attended Tuesday night.

“Dan stood up and gave a speech on blight, and if you want to get Dan going, ask him to talk about blight,” said Duggan.

The mayor said that when Gilbert sat down, someone congratulated him on the Cleveland Cavaliers, the team he owns in the National BasketballAssociation, having won the No. 1 pick in the just-concluded draft lottery.

Gilbert thought he was being kidded.

“Dan was so wound up about blight that he missed the 18 messages on his phone that the Cavs got the No. 1 draft pick,” said Duggan.

Chase entered the Detroit market in 2004 when it merged with Bank One, which had merged with National Bank of Detroit in 1995. NBD traced its history back to 1935, when it began making mortgage loans in Detroit.

According to the U.S. Federal Deposit Insurance Corp., as of last June 30, Chase was No. 1 in deposit market share in Michigan, with 18.9 percent, compared to 14.7 percent to runner-up Comerica Bank. Chase had the most branches in the state, 305. Fifth Third Bank was No. 2 with 249.